No one knows the importance of cash-flow better than a business owner. Everything else can be going great but if those dollar bills aren’t coming in when you need them it's cause for alarm.
So, what can you do to boost cash-flow so it doesn’t hang like a cloud over your day-to-day business activities?
Try these tips I recently came across:
- Be clear about payment terms with your clients right from the get-go. If you have a contract, include payment terms. Otherwise, put them in a letter.
- Chase, chase, chase. Some people feel uncomfortable asking for money they're owed, even if it's overdue. If it's past due, ask and keep asking.
- Get someone else to ask. If you're worried about souring personal relationships, get an accountant or lawyer to do it for you.
- Be flexible. Allow extended payment terms but encourage prompt payment with a discount for those who pay upfront.
- Make it sustainable. Don’t agree to terms you can't sustain as a business, Consider invoice financing to bridge any gaps.
These tips come from British legal advisor Karen Holden but they're just as applicable here.
By the way, did you know you can sometimes gain a discount on your insurance premium for paying the full amount up front? If you'd like to know more, please contact me.